India’s hotel industry stays resilient in 2025 despite geopolitics, airline crisis and weather woes

New Delhi: India’s hospitality sector sustained its growth momentum in 2025 despite geopolitical challenges such as Operation Sindoor and the West Asia conflict, besides adverse weather conditions and the IndiGo airline crisis.

Hotels performed strongly across the key benchmarks of average daily rates, and revenue per available room growth, showed the India Hotel Market Review 2025 report by industry tracker Horwath HTL.

The year saw the largest-ever supply addition, with openings and conversions crossing 19,000 rooms, and net inventory growth of 15,500 rooms. Occupancy rate increased by 1.1 percentage points to 64%, while average daily rate rose 8.6% to Rs 8,624, giving revenue per available room growth of Rs 5,522, up 10.8%.

As per report, 45% of branded room inventory is currently owned or managed by companies listed in India. “2025 was also a qualitatively better year as we had challenges coming up every quarter, but the hospitality industry demonstrated the confidence, strength and resilience to handle them,” said Vijay Thacker, MD of Horwath HTL India. Existing announcements by chains peg the supply addition at 25,000-28,000 rooms in 2026, though, Thacker said, realistically, it should be in the range of around 20,000. Average occupancies are expected to remain in the mid-to-high 60s for the coming several years.


“When you look at the big business cities, occupancies can go up to 80-85%,” said Thacker. “But, a lot of new supply is coming into tier-2 and tier-3 markets, and other leisure markets. They are seasonal, and often, weekday dependent business markets. As a result, the weighted average occupancy could remain the mid to high 60s range for India for several years," he added.

Thacker said several markets in the metros have will have limited supply growth over a 15 year period from 2015-2030.

"There is potential to add supply even in the metros. Religious tourism and the North East hold a lot of potential," he said.

"Another critical takeaway from the report is that almost 45% of the inventory is owned or managed by companies listed in India. This means good news for the sector as it leads to a greater focus on more responsibly led operations and quality financial management," he added.

Shwetank Singh, who recently took over as the MD and CEO at Chalet Hotels, said India’s GDP growth, demographic dividend, the demand supply gap, and a mindset shift of travellers that leads them to taking more frequent breaks bodes well for the sector. "There were concerns after quarter two of this fiscal about slowing growth, but those can be put to rest, considering quarter three was a very good quarter for us," he said.

"Better airport connectivity and road infrastructure have led Indians to take multiple holidays instead of one yearly holiday. Travel is not being seen as discretionary spending and is becoming a way of life for many," he added.

Greater participation by listed firms is a healthy development as it implies higher governance standards, capital discipline, and transparency, said Ranjit Batra, CEO of Ventive Hospitality.

Batra said financial year 2026 has been a year of 'consolidation' alongside 'measured expansion' for Ventive Hospitality. On the openings side, it added incremental keys through the acquisition of Hilton Goa Resort and the addition of Soho House Mumbai.

It also signed seven hotels with Marriott International across India and Sri Lanka. "This gives us strong visibility into future expansion and further strengthens our long-standing partnerships with global brands," added Batra.

Domestic travel will continue to be the primary demand engine for the sector led by leisure, meetings, incentives, conferences, and exhibitions (MICE), and weddings, while supply is expected to remain below demand levels in key markets, enabling strong pricing power, said Nikhil Sharma, MD and COO (South Asia) at Radisson Hotel Group.

“With rising household incomes, improved connectivity and corporate decentralisation, emerging cities are also expected to see stronger revenue per available room growth compared to metros,” he said.

Sharma said 2025 was a 'milestone year' for Radisson Hotel Group in India, marked by 'strong momentum' across signings, openings and overall operational performance.

In 2025, it opened 14 hotels (around 1,200 keys) and is continuing this trajectory into 2026 with plans to open another 20 hotels.

"From an operational standpoint, the portfolio delivered a strong year with a revenue per available room growth of 6% and an average daily rates growth of 7%, supported by healthy occupancies and disciplined rate strategies across key markets," he added.

Parveen Chander Kumar, EVP, commercial, at IHCL, said domestic travel sustained the momentum last year and the current quarter has been going well for the chain considering high-profile visits, summits and weddings. "Besides average daily rates and revenue per available room growth, we have also been performing well in segments such as F&B and banqueting," he added.